3 Things In Biotech You Should Learn Today: April 23, 2017

Welcome to another edition of “3 Things in Biotech You Should Learn Today,” a digest from the world of pharmaceuticals and biotechnology companies.

Today we’ll be giving the spotlight to some small cap stocks, one with some good news, and another with some pessimistic news. We’ll also hear about the ever-growing pool of competitors in the space of Hepatitis C virus (HCV) infection.

Let’s get started!

Basilea and Quintiles lay the groundwork for their pivotal studies in skin infection

Bacterial infections of the skin are very common, and hundreds of thousands of cases per year require hospitalization and intensive supportive and antibiotic treatment. This drives a major need to discover new antibiotics, most of which were developed and approved before 2010.

One of the products in development by the small European biotech Basilea (OTC:BPMUF) and partner Quintiles (NYSE:Q) is ceftobiprole, which has had a rough development cycle, having been rejected by the FDA in 2009 due to concerns about the conduct of their clinical trials.

Since then, BPMUF has gotten its act together. And recently they announced that they have arrived at a special protocol assessment with the FDA for its phase III clinical trials. This agreement outlines in clear terms what criteria the FDA will find acceptable for the approval of BPMUF’s agents, and it can help to speed along the final review process.

Looking forward: BPMUF suffered a major setback with this agent almost a decade ago. It is nice to see them achieve an agreement with the FDA, which could pave the way for approval over the next few years. Considering this market is sized in the hundreds of millions of dollars, it would be a major gain for BPMUF to gain a foothold. And certainly the medical community is in need of novel, effective antibiotic agents.

Vernalis takes a licking from an FDA response for its viral rhinitis treatment

Vernalis (OTC:VNLPF) is another small-cap stock with a diverse pipeline of oncology drugs and treatments for other ailments, the most advanced of which is CCP-07, which has been rather shrouded in mystery throughout its development.

No trial data have been divulged. Only bits and pieces on the progress; the last announcement we got was April 2016, where they let the community know that their bioavailability trial had completed.

A subsequent NDA has left investors waiting…until recently. VNLPF disclosed that the FDA had issued a complete response letter outlining deficiencies in their application. The issues were not specified, but the FDA did not have a problem with the pharmacokinetics or bioavailability data.

Looking forward: In multiple issues of the digest recently, we’ve seen the result of these complete response letters: pessimism. Oftentimes, they result in significant delays, if not outright failure of a drug’s launch. Vernalis stated in their press release that they remain committed to get CCP-007 approved. But we’ll now have to wait and see.

AbbVie’s new HCV drug rolling out good data at the International liver congress

Much has been written about the declining fortunes of Gilead Sciences (NASDAQ:GILD), primarily as a result of lower revenues and increasing competition in the Hepatitis C virus (HCV) infection.

AbbVie (NYSE:ABBV) announced results that may signal further ratcheting up of this competition. At the European Association for the Study of the Liver (EASL), GILD presented findings from the phase III ENDURANCE-3 trial, testing its antiviral combination therapy glecaprevir/pibrenasvir in patients with HCV infection and no cirrhosis, compared with standard sofosbuvir/dadclatasvir.

One notable inclusion is the GT-3 genotype, which is notably more difficult to cure among the subgroups of HCV infection.

Results of ENDURANCE-3 showed that glecaprevir/pibrentasvir was able to achieve comparable sustained virologic response at 12 weeks compared with standard of care, both for the 8-week dosing and 12-week dosing cohorts. The 12-week dosage was shown to be non-inferior to 12 weeks of the standard therapy.

Looking forward: As ABBV looks forward to the approval of its first combination therapy in HCV treatment, these results present further support for the idea that they will get the nod for this agent. This will add to an ever-widening pool of agents, and who knows what this will mean for the conversation surrounding pricing of these drugs? Time will tell, but it is always a good sign to have new, effective therapies in this space, as far as patients go.

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Disclosure:I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Editor’s Note: This article covers one or more stocks trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.